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BAGHDAD (Reuters) - An end to U.S. political dominance in Iraq could encourage feuding Kurds and Arabs to seek a settlement over the oil-producing northern province of Kirkuk, a top lawmaker said.

But parliament speaker Ayad al-Samarai acknowledged it would be difficult, even in the best of circumstances, to put end to a struggle that has blocked vital energy legislation for years and now threatens to delay national elections slated for January.

"Over the last six years there have been no (real) steps to settle Kirkuk ... The United States didn't want it; the United Nations didn't take the steps," needed to settle the feud, Samarai, a leading Sunni Arab politician, said on Sunday.

"But the situation may be better now ... The responsibility now rests with Iraq and it's up to Iraq on its own to deal with this issue," he said in an interview.

Kirkuk not only combines historic feuds over oil and land but is now seen as a serious security threat just as Iraq emerges from the worst of the bloodshed unleashed by the U.S.-led invasion in 2003.

Minority Kurds' claims that Kirkuk is a rightful part of their northern enclave have stirred objections from the region's Arabs and Turkmen and raise concerns about Iraq's future stability as U.S. troops prepare to withdraw by the end of 2011.

Prime Minister Nuri al-Maliki, part of Iraq's Shi'ite Arab majority, declared Iraq had reclaimed its sovereignty last month when U.S. combat troops pulled out of Iraqi cities and towns. American political influence, once almost boundless, is fading.

But violence continues and Iraq remains mired in political quarrels that some fear could plunge it back into all-out war.

"Kirkuk is a special case and it requires special treatment and special legislation ... We need an incremental solution."

Samarai suggested that the election of a new, temporary provincial council might with the help of the United Nations be able to satisfy the region's feuding factions. U.N. officials have been trying to find common ground, and put forward several compromise options earlier this year to no clear effect.

Handing Kirkuk to Iraqi Kurds could fuel ambitions of creating an independent Kurdish state, anathema to neighbor Turkey which has its own Kurdish minority.

OIL, GAS, POWER

Control of Kirkuk is tied up with oil and gas legislation that will define how export revenues are shared and will set an outline for foreign firms in Iraq, which has the world's third largest oil reserves but is in dire need of outside investment.

Until the laws are passed, the Oil Ministry's steps to renew the oil sector will be shrouded by legal doubts -- lawmakers are currently threatening to block the ministry's recent deal with BP and China's CNPC to develop giant oilfield Rumaila.

Kirkuk's complexity is rooted in its history. Saddam Hussein moved Arabs to the city en masse to boost his influence there. Arabs and Turkmen claim Kurds have flooded the city since 2003, making demographics a charged electoral issue.

Last year, a row over local elections in Kirkuk delayed Iraq's provincial polls, and parliament was only able to pass a provincial polls law by leaving Kirkuk out of the process.

Some fear that may happen again as Iraq looks ahead toward national polls that may be a pivotal test for a young democracy.

Samarai insisted that according to the constitution national elections must take place in January as scheduled, even though disagreement over how to hold the polls in Kirkuk has already bogged down committee debate over an election law.

Samarai acknowledged it would be even more difficult to pass energy laws ahead of the polls. "This becomes part of electoral competition, and different parties are unwilling or unable to do anything that might affect their position," he said.